Which of the following types of insurance must adhere to specific reserve requirements under South Carolina law?

Life insurance must adhere to specific reserve requirements under South Carolina law primarily due to the long-term nature of life insurance contracts. Reserves are necessary to ensure that an insurance company can meet its future policyholder obligations, particularly since life insurance policies often have a duration that spans many years or decades. These reserves are calculated based on various factors, including the mortality rates of policyholders and the expected future payouts.

In South Carolina, as in many other states, regulatory oversight mandates that life insurers maintain adequate reserves. This requirement not only protects policyholders by ensuring that the insurer remains solvent and can pay claims but also stabilizes the insurance market by enforcing financial prudence among insurers.

While health, property, and casualty insurance also have important financial standards and regulations, they do not typically have the same specific reserve requirements as life insurance due to their different nature and claim timelines. For instance, health insurance often operates on a shorter-term basis with annual renewals, while property and casualty policies usually deal with claims that are resolved in a more immediate timeframe compared to life insurance, which requires a significant amount of planning for long-term payouts.